How to Finance a Hyatt Studios Franchise: Extended-Stay Builds
By Anthony Cornella
A Hyatt Studios franchise loan usually funds ground-up construction of an upper-midscale, extended-stay hotel where every room is a studio suite with a full kitchen. Because most projects are new builds, the financing conversation centers on land, construction budgets, the time it takes a long-stay hotel to fill and the owner’s development experience.
US Professional Funding is not affiliated with, sponsored by or endorsed by Hyatt Studios or Hyatt; the name is used only to describe the business. Figures from the franchisor’s disclosure document and company reports can change, loan programs vary, and every loan is subject to approval. Nothing here is legal, tax or investment advice.
Hyatt Studios Franchise Loan at a Glance
- Franchisor: Hyatt, which includes Hyatt Studios in its Essentials portfolio
- Segment: upper-midscale extended stay, designed to serve both long-stay and transient guests
- Launched: announced in April 2023; the first hotel opened in Mobile, Alabama, in 2025 with 122 studio suites
- Prototype: originally sized at approximately 122 rooms with flexibility to scale; Hyatt’s October 2026 update says the newer prototype reduces the standard key count and overall square footage
- Initial fees: Hyatt’s annual report says franchisees generally pay an initial application fee and/or a design services fee; see Item 5 of the Franchise Disclosure Document (FDD)
- Royalty: across Hyatt’s franchise agreements, typically 2.75% to 5% of gross rooms revenues, with some agreements structured differently
- Term: typically 20 years, with franchisees typically having the option of a 10-year successor agreement
- Pipeline: over 70 hotels totaling more than 8,200 rooms, per Hyatt’s October 2026 update
- Estimated initial investment and net worth requirements: not verified; see Item 7 of the FDD
- SBA Franchise Directory: listed as Hyatt Studios under code S8534, with notes on the Hyatt comfort letter and management agreements
What Is Hyatt Studios?
Hyatt introduced Hyatt Studios in April 2023 as its first upper-midscale extended-stay brand in the Americas, and said it had signed letters of interest for more than 100 hotels at launch. Hyatt built the brand around three ideas: efficient, scalable prototypes; a lean operating model; and flexible brand and design elements that can adapt to primary, secondary and tertiary markets.
The first hotel opened in the Tillmans Corner area of Mobile, Alabama, in early 2025, developed by a franchisee under a franchise agreement with Hyatt. Its 122 studio suites each include a kitchen with a full-size refrigerator, a built-in cooktop, a microwave with air fryer and convection functions, a dishwasher and cookware, plus a sleeping area and a separate lounge. Shared amenities include a 24/7 market, a free grab-and-go breakfast, a 24-hour fitness studio, self-service laundry and an outdoor patio with a firepit and grill. Hyatt describes electric vehicle charging stations as a signature feature across all properties, and the hotels are pet-friendly.
In 2024, Hyatt said nearly half of the brand’s pipeline properties came from first-time Hyatt owners in markets new to Hyatt. That matters for financing: many borrowers will be experienced developers who are new to this franchisor, building in smaller markets where lenders have limited comparable branded data.
Why lenders like the extended-stay model, with caveats. Longer guest stays can mean steadier occupancy and lower turnover costs, and a lean staffing plan supports margins. But a new extended-stay hotel can take time to build a base of long-stay guests, so lenders look closely at local demand drivers such as industrial employers, hospitals, military bases and project work.
Hyatt Studios Franchise Costs
We could not access the current Hyatt Studios FDD, so this article does not quote an investment range. Item 7 gives the official estimate and the assumptions behind it.
Application and design fees. Hyatt’s annual report says franchisees generally pay an initial application fee and/or a design services fee. Item 5 gives the Hyatt Studios amounts and any refund terms.
Land and construction. Most Hyatt Studios hotels are new builds, so land, site work, construction and soft costs make up the bulk of the budget. Hyatt’s October 2026 update describes a revised prototype with fewer standard keys and less overall square footage, an expanded three-bay lobby, required meeting space and updated building systems. Owners should build their budget from the prototype version in the current FDD and design package.
Kitchen-equipped suites. Every suite carries appliances and cookware that a standard hotel room does not, which raises furniture, fixtures and equipment costs and future replacement reserves.
Expect the budget to include:
- Application and/or design services fee (Item 5)
- Land, site work and ground-up construction
- Architecture, engineering, permits and other soft costs
- Suite furniture, kitchen appliances and cookware
- Market, breakfast, laundry and fitness equipment
- Electric vehicle charging stations
- Technology, reservation and property management systems
- Interest during construction, pre-opening costs and working capital
Ongoing Fees and How They Affect Your Loan
Hyatt’s annual report says royalties are typically 2.75% to 5% of gross rooms revenues. Some agreements instead charge a fee based on room revenues booked through Hyatt reservation channels, typically 7%, and others use 6% of gross room revenues plus 3% of gross food and beverage revenues. Franchisees also pay for services such as centralized reservations, technology, digital media and national advertising. Item 6 shows the Hyatt Studios formula.
For a Hyatt Studios franchise loan, lenders subtract franchise fees, any management fee and a furniture and equipment reserve before testing debt service coverage. Because kitchens wear faster than standard room furniture, a realistic reserve matters more here than in many hotel types.
Franchisor Requirements for New Owners
Hyatt does not publish fixed net worth or liquidity minimums for Hyatt Studios in the materials we reviewed. Its annual report says Hyatt approves the plans for, and the location of, franchised hotels and reviews their operation. Expect Hyatt to evaluate the site and market, the development team’s track record, the proposed management and the owner’s financial capacity to complete construction.
Ways to Own a Hyatt Studios
Ground-up development. This is the primary path. Financing typically combines a construction loan with a plan for permanent debt once the hotel opens and stabilizes. See hotel start-up financing.
Adaptive projects. Hyatt has said designs are flexible, and its first locations included a custom build-out. Any project that departs from the prototype needs Hyatt’s design approval before lenders will commit.
Buying an existing Hyatt Studios. As the system matures, resales will occur. A transfer requires Hyatt’s approval, and lenders will underwrite the hotel’s actual operating history. See hotel acquisition financing.
Financing Options for a Hyatt Studios Franchise
SBA 504 loans. For owner-occupied hotel construction, SBA 504 loans pair a first-position loan with a certified development company loan and a borrower contribution, subject to program rules. This structure is often a good fit for long-lived real estate.
SBA 7(a) loans. SBA 7(a) loans can cover construction, equipment, franchise fees and working capital. The 7(a) program maximum is currently $5 million, and program rules can change, so larger projects may pair 7(a) with other financing.
Conventional construction and permanent loans. Many developers use conventional business loans for construction, then refinance into permanent debt after stabilization. See hotel debt refinancing.
Brand-related construction lending. In 2026, Hyatt announced a structured loan program with an outside hospitality finance firm for qualified developers building new Hyatt Studios hotels in the U.S. Hyatt says it may offer greater leverage than conventional loans at market rates, subject to underwriting and project qualifications. Compare it with SBA and conventional options, and review Item 10 of the FDD for any financing the franchisor itself offers.
Equipment financing. Suite appliances, laundry machines, fitness equipment and charging stations can sometimes be financed separately, though the primary lender will count that debt.
Working capital. A new extended-stay hotel needs cash for payroll and fixed costs while it builds occupancy. See hotel working capital.
Seller financing on resales. When buying an existing hotel, a seller may carry part of the price. Any seller note would typically be subordinate to the senior loan, and SBA programs may limit how it is structured.
SBA Loans for Hyatt Studios Franchisees
SBA-backed loans are made by participating lenders with an SBA guarantee on part of the loan. The SBA Franchise Directory tells lenders whether a brand’s franchise relationship is eligible.
The listing. Hyatt Studios is on the SBA Franchise Directory under code S8534. A listing does not approve any borrower.
Comfort letter. The directory says the Hyatt Comfort Letter has been approved by the SBA. This letter between Hyatt and the lender generally addresses notice of defaults and the lender’s ability to keep the hotel operating under the brand if problems arise, and the approved form needs no separate SBA review.
Management agreements. If the applicant also operates under a third-party management agreement, the lender or certified development company must review it under SBA rules to determine whether the applicant and manager are affiliated. The applicant is not eligible if the management company is, or is affiliated with, the franchisor, and the SBA has not reviewed any Hyatt management documents. Put simply, a self-managed or independently managed Hyatt Studios may qualify; one managed by Hyatt would not.
Application tips. Present a complete construction budget, a contractor with hotel experience, a feasibility study and your management plan. Our SBA loan calculator can help with planning estimates; results are not an offer.
How Lenders Evaluate a Hyatt Studios Deal
Personal credit and financial history. Lenders review credit, tax returns and personal financial statements and typically require guarantees from significant owners.
Net worth and liquidity. Construction projects need equity up front and reserves for overruns and the ramp-up period.
Development and hotel experience. Prior hotel development or ownership strengthens a request, especially for an owner who is new to Hyatt.
Feasibility and projections. Lenders want a market study showing long-stay demand, realistic weekly and nightly rates, a ramp-up schedule and each franchise fee line.
The FDD and franchise agreement. Lenders review the term, successor rights, transfer provisions, construction deadlines and the comfort letter. Item 19 shows whether the FDD includes financial performance representations.
Site and construction. Expect review of the land purchase or ground lease, plans, contractor and budget.
Multi-Unit Growth and Development
Developers often plan several Hyatt Studios hotels in one region to share management and staffing. Lenders typically finance each hotel separately and will want to see the first hotel stabilize before committing to the next. Our article on multi-unit franchise financing explains how lenders view growing portfolios.
Real-World Scenarios
A developer new to Hyatt. An experienced hotel developer in a secondary market builds a first Hyatt Studios near a large industrial employer, using an SBA 504 structure and equipment financing for suite kitchens.
A conventional build with refinance. An ownership group uses a conventional construction loan, opens the hotel, then refinances into permanent debt once occupancy stabilizes.
A regional pipeline. A developer signs for several hotels in one state, finances the first with an SBA loan and uses its results to support financing for the second.
Common Mistakes to Avoid
- Building from an outdated prototype budget
- Underestimating how long a long-stay hotel takes to fill
- Setting kitchen replacement reserves too low
- Overlooking the SBA management agreement rule
- Comparing loan offers on rate alone instead of leverage, terms and covenants
- Leaving too little working capital after opening
Read more in hotel loan mistakes to avoid.
Next Steps to Finance Your Hyatt Studios Franchise
Step 1: Confirm your site. Work with Hyatt’s development team to confirm market fit.
Step 2: Review the FDD. Study Items 5, 6, 7, 10, 17 and 19 with an attorney and accountant.
Step 3: Commission a feasibility study. Document long-stay demand and rates in your market.
Step 4: Finalize the budget. Price the current prototype with your architect and contractor.
Step 5: Choose management. Decide on self-management or an independent manager with the SBA note in mind.
Step 6: Compare financing. Weigh SBA 504, SBA 7(a), conventional and brand-related construction options with a financing specialist.
Step 7: Close and build. Coordinate Hyatt approval, the comfort letter, loan closing and construction draws.
Hyatt Studios Franchise Loan FAQs
How much does it cost to build a Hyatt Studios?
We could not verify the Item 7 range. Costs depend on land, local construction prices and the prototype version. Item 7 of the current FDD gives the official estimate.
What is the Hyatt Studios franchise fee?
Hyatt’s annual report says franchisees generally pay an initial application fee and/or a design services fee. Item 5 lists the amounts.
What royalty does Hyatt charge?
Hyatt says royalties across its franchise agreements are typically 2.75% to 5% of gross rooms revenues. Item 6 shows the Hyatt Studios terms.
How many rooms does a Hyatt Studios have?
The original prototype was sized at approximately 122 rooms, and the first hotel opened with 122 suites. Hyatt’s newer prototype reduces the standard key count.
Is Hyatt Studios eligible for SBA loans?
Yes. It is on the SBA Franchise Directory under code S8534, with an SBA-approved Hyatt Comfort Letter and a required review of any third-party management agreement.
Does Hyatt help with financing?
Hyatt announced a structured construction loan program with an outside hospitality finance firm for qualified U.S. developers in 2026. Item 10 of the FDD discloses any financing offered by Hyatt itself.
How much net worth do I need?
Hyatt does not publish minimums in the materials we reviewed. Lenders will expect enough equity and liquidity to complete construction and carry the ramp-up period.
How long is the franchise term?
Hyatt says its franchise agreements typically run 20 years, with franchisees typically having the option of a 10-year successor agreement.
Can a first-time hotel owner get a Hyatt Studios franchise loan?
It is harder for a ground-up project. A partner with development experience or an experienced management company can help.
Can I finance the suite kitchens separately?
Often, yes. Appliances and other equipment can sometimes be financed on their own, though lenders count that debt when sizing the main loan.
Final Thoughts
Hyatt Studios pairs a large loyalty system with a lean extended-stay model built for markets Hyatt has not served before. A well-prepared Hyatt Studios franchise loan request combines a current construction budget, solid evidence of long-stay demand and realistic reserves.
US Professional Funding helps developers and franchise owners finance hotel construction, acquisitions, equipment and working capital. Learn more about our franchise financing and hotel and motel financing solutions.
